Saudi Aramco informally informed Asian refineries that crude oil loading at Yanbu port will soon resume.

Saudi Aramco has informally signaled to several Asian refineries that crude oil loading at Yanbu port is expected to resume soon. This marks the first time Saudi Arabia has conveyed a clear expectation of supply recovery to buyers since the East-West pipeline was forced to shut down by drone attacks in September.

According to Bloomberg, citing sources familiar with the matter, at least three Asian fuel processing companies have received informal assurances from Saudi Aramco executives that loading will resume soon , but no specific timeline was given. These sources indicated that the communications were not informal notifications, and Saudi Aramco declined to comment.

Currently, some Asian refineries have missed their crude oil loading slots at Yanbu Port due to pipeline outages, with their vessels either anchored in waters near the port or en route. Meanwhile, European buyers are facing a more severe impact – Saudi Aramco informed at least two European refineries last week that crude oil supplies under long-term agreements would be completely suspended in October due to pipeline damage, and this decision applies to all European buyers.

The East-West pipeline has stopped operating, and supplies to Yanbu Port have been almost completely cut off.

The East-West pipeline was forced to shut down on September 10 after a drone attack launched from Iraq. The pipeline had been supplying the port of Yanbu with approximately 4 million barrels of crude oil per day. Following the pipeline's shutdown, loading activities at Yanbu port nearly ceased.

According to Bloomberg last week, citing sources familiar with the matter, Saudi Arabia is seeking to restore the pipeline to about half its capacity within days and aims to reach full capacity within about six weeks.

This 1,200-kilometer-long pipeline traverses the Arabian Peninsula, connecting Saudi Arabia's major eastern oil fields with the port of Yanbu on the Red Sea coast. It is a crucial conduit for Saudi Arabia to transport crude oil to Europe and Asia, bypassing the Strait of Hormuz. The pipeline originates from the world's largest crude oil processing facility near Abqaiq, traverses deserts and the Hejaz Mountains, and reaches the west coast. Approximately 2 million barrels per day of crude oil are used for domestic consumption at refineries along the Red Sea coast.

Asian buyers were less affected, while European customers were hit hardest.

Following the pipeline shutdown, Saudi Arabia increased its exports to Asia from the port of Rastanura in the Persian Gulf, with the crude oil being delivered via ship-to-ship transshipment through the Strait of Hormuz in the Gulf of Oman. This alternative route limited the disruption to supply for Asian buyers.

In contrast, European customers are in a more passive position. Since Yanbu Port is the main loading point for European crude oil imports from Saudi Arabia, the pipeline shutdown directly led to a complete disruption of long-term supply contracts in Europe for October. Nicholas Dyer, an analyst at energy market research firm Energy Aspects, pointed out that storage tank inventories at Yanbu Port are currently at historically low levels, and Saudi Arabia is unlikely to empty the tanks to maintain exports, which will further reduce the available supply at Yanbu Port.

Dyer also warned that the tightening supply at Yanbu port could have a ripple effect, impacting Sidi Kerir, the entrance to the Suez Canal in Egypt—where Saudi Arabia diverts crude oil to European buyers via the Suez Canal—potentially leading to further delays and cancellations.

Pipeline safety concerns persist, and uncertainties remain regarding exports after restarting.

The east-west pipeline is 1,200 kilometers long, and its security along the route is extremely challenging. Most sections of the pipeline are buried at a depth of about 1 meter, which provides some protection against air attacks, but the 11 pumping stations along the route are the most vulnerable points, where the pipeline is exposed above ground.

Satellite images show that a pumping station south of Medina was damaged in the September attacks, but Saudi officials have not yet confirmed the exact location of the damage. According to sources, Saudi Aramco is attempting to bypass the damaged section of the pipeline in order to restore some of its capacity.

Even if the pipeline is successfully restarted, it remains uncertain whether exports from Yanbu Port can fully recover.

The Houthi rebels in Yemen have threatened to blockade Saudi ports and continue to strengthen their military presence near the Bab el-Mandeb Strait, posing a sustained threat to ships transiting the waterway. This means some cargo may be forced to be diverted northward via the Suez Canal, resulting in higher costs and longer transit times for Asian buyers.

Geopolitical risk remains the core variable.

On the diplomatic front, Saudi Crown Prince Mohammed bin Salman has sought military assistance from US President Donald Trump and British Prime Minister Andy Burnham to deal with the Houthis, but neither country has indicated a willingness to intervene directly.

For market participants, whether the East-West pipeline can resume as planned, when loading at Yanbu Port will fully restart, and whether shipping safety in the Red Sea can be guaranteed remain the three core variables influencing near-term crude oil supply expectations.

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